Offset mortgage - borrowing from reserve

Flugelhorn

Have had an offset mortgage for 300k since 2007 (so prior to the credit crunch) - 40k left owing on it but this is fully offset and has been for some years.

Might want to borrow some of the remaining 260k at some stage to enable purchase of retirement property

Does anyone know how you borrow the money ? I think you used to just pay it out of the linked account at one time but suspect may have to jump through hoops these days - do they treat it as new borrowing?

TrickyDicky101

Are you sure you are able to borrow back money (ie do your terms & conditions permit it)?

Flugelhorn

it is described as a "borrowing facility" and says:

You can apply for additional borrowing at your existing rate with no fee. You can also borrow back up to your agreed mortgage facility

At the time we took out the mortgage it was very much sold as "you can have the money at any time / spend it on anything" of course that was pre-crunch, I just wondered if others had experience of borrowing back the money?

TrickyDicky101

It would be worth giving them a call to establish what you need to do to borrow the money back. Certainly sounds like you should be able to. That's a great facility to have :envy:

Flugelhorn

I think I'll have to do that, hate talking to financial institutions but think I really need to know.

Thrugelmir

Terms and conditions will be updated every year to accord with current regulations. You'll need to apply and be subject to current lending criteria. The question then is how will you repay the £300k owed.

TrickyDicky101

Thrugelmir wrote: »

Terms and conditions will be updated every year to accord with current regulations. You'll need to apply and be subject to current lending criteria. The question then is how will you repay the £300k owed.

That is simply not my experience with my NationWide mortgage with has a borrowback facility.

minimike2

What lender is the mortgage with?

Sounds like it might be Barclays when you say linked account and reserve?

If so, you can just transfer the money out of the reserve, up to its limit amount.

Bear in mind it will be repayable in full when your mortgage reaches its maturity date. Again, if Barclays, Interest will be charged at the rate of the mortgage and interest costs charged monthly, but no capital payment will be taken for repayment towards the drawn reserve.

Thrugelmir

Was it Halifax? They offered an offest reserve some years ago.

Flugelhorn

It is RBS offset flexible - It finishes in 2023, there'll be enough money to pay it off then